Comparing April 2007 to April 2008

Real estate sales of single family residences in Big Bear remained sluggish in April, with number of units sold dropping from 62 in April 2007 to 51 in 2008, representing an 18% decline in sales. In comparison, the 10 year average for number of units sold in the month of April is 165. This April’s numbers represent a 69% decline in sales off the 10 year average.

As expected, the median sales price continued to fall as well, with April 2007’s median price of $339,950 dropping to $309,000 in April 2008, representing just over a 9% decline.

The average sales price to list price ratio (SP/LP) was 94% in April 2008 compared to 95% in April 2007. This suggests that sellers are conceding even more off their list price during negotiations than during the same period last year.

The average days on market (DOM) actually decreased from 141 days in April 2007 to 134 days in April 2008. This might be attributed to sellers pricing their properties more aggressively and accepting offers more readily than before.

The number of homes on the market has remained similar to last year’s numbers, with just under 1200 homes for sale valley-wide.

The Year in Comparison…

Comparing Big Bear real estate sales so far this calendar year compared to the same period in 2007, the number of units sold is down almost 40%.

The median sales price over that time period has also fallen from $315,000 in 2007 to $294,500 in 2008 representing a decline of almost 7%.

Big Bear Real Estate Outlook…

On the heels of the slowest year sales-wise in over 26 years (that’s as far as our records go back), this year has started even slower than last. That being said, the worse the numbers get, the more it suggests we are at, or nearing, the bottom.

Speaking with other agents around Big Bear, we’re definitely seeing interest from prospective buyers, but still sensing hesitancy, as everyone wants to buy the minute the market hits bottom. The problem with that is that once we know where the bottom is, it will be well behind us.

Regardless, a 10 year history of sales shows us that the summer months are by far the busiest months for buying and selling real estate in Big Bear and I’d expect this year to be no different. I’ll go out on a limb and say we see things turn around a little this summer and a slow but steady recovery start to settle in.

With mortgage rates still hovering around 6% for a 30-year fixed conventional loan, and with prices having fallen 25-30% on average off their peak, it certainly is the best time to buy in the last few years.

Written by Paul Zamoyta at First Team Real Estate, Big Bear Lake, (909) 866-4354

(If you have any questions or comments about this post, please contact me: info@Zamoyta.com)

With the lake season upon us, Big Bear’s Municipal Water District officials have stepped up their preventive efforts in an attempt to keep the invasive Quagga mussel from inhabiting Big Bear Lake.

The Quagga Mussel, a native species of the Black Sea in Eastern Europe, found its way across the Atlantic Ocean via the hulls and ballasts of ships. Once the Quagga arrived in the United States, it didn’t take long for the species to migrate west. The Quagga currently inhabits several southwestern lakes, including Lake Mead, Lake Havasu and the Colorado River.

The Quagga has been known to cause damage to boats and other aquatic machinery as well as threaten local ecosystems. The mussels can cause damage to boat motors by blocking the cooling systems causing overheating and have been known to jam boats’ steering systems as well. The Quagga affects the local ecosystems by filtering plankton out of the water, thus reducing the food source for other small native species. The Quagga also has high concentrations of toxins in their bodies, which can poison species that prey on the mussel.

Ultimately, the fear is that if Big Bear Lake were to become infested by the Quagga Mussel, there might not only be a significant change to the health of our lake, but that the damage would certainly spread downstream, potentially threatening the Seven Oaks Dam and the Southern California Edison power plant.

In an attempt to keep the Quagga from making its way into Big Bear Lake, the local Big Bear MWD is staffing the public boat launches with inspectors looking for evidence of the mussels. They are requiring all boaters to fill out a questionnaire prior to launching their vessel. If there is a suspicion of Quagga infestation, the MWD will provide a high-temperature pressure wash cleaning at no expense before allowing the launching of the vessel.

The best thing that can be done to prevent the spread of the Quagga is to make sure your boat is completely dry, inside and out, before launching it in Big Bear Lake - particularly if you have recently used your boat in an infected lake or river. This includes draining all areas of your vessel that might contain water, including but not limited to, removing your hull plug draining any accumulated water, making sure any water inside your motor and bilge are expelled, and any buckets or other water containers on the boat are emptied. The Quagga and its eggs can be microscopic, so it is of utmost importance that your vessel is dried thoroughly before launching it on the lake.

To accommodate these inspections, there are new hours for Big Bear’s public boat launches. The East Ramp will be open from 6:00am to 6:00pm Sunday through Thursday and 6:00am to 7:00pm Friday, Saturday and Holidays. Boat retrieval after closing hours will be allowed at the East Ramp, provided the trailer and tow vehicle are parked within the facility before the gates are locked. The West Ramp will be open from 6:00am to 6:00pm everyday except for Tuesdays and Wednesdays. There will be no after-hours boat retrieval at the West Ramp.

If you have a private boat launch, it is imperative that you follow the aforementioned preventative measures before putting your boat on the lake. The longer your boat has remained dry before launching, the better the chance you won’t infect the lake. It is highly recommended that you bring your boat by one of the public boat launches to have it inspected before putting it in the water. All it takes is a few drops of infected water to potentially threaten the entire lake!

For more information and to keep up to date with the latest rules, regulations and procedures regarding Big Bear Lake, go to the Municipal Water District’s website at http://www.bbmwd.org/

Hope to see you out on our Quagga-free lake this summer!

Written by Paul Zamoyta, First Team Real Estate, Big Bear Lake, (909) 866-4354

(If you have any questions or comments about this post, please contact me; blog@Zamoyta.com)

Big Bear real estate has continued to see record drops in number of homes sold through the first quarter of 2008. Compared to the same quarter in 2007, the number of units sold has declined from 215 in 2007 to 116 in 2008, representing a drop of 46%. This continued drop comes on the heels of the worst year ever with regards to units sold - at least the worst we have on our records dating back 26 years. 

As would be expected, along with the drop in Big Bear home sales has come an accompanying slide in home values. The median price of a home in the Big Bear Valley has seen a 16% drop, falling from $310,000 in the first quarter of 2007 compared to $259,950 for the first quarter of 2008. (In total, it is estimated that real estate prices have fallen 25% to 30% since the market’s peak in Big Bear.)

The current inventory of homes for sale in Big Bear is 1125 properties. Although only slightly higher than last year at this time, this is almost three times the number of listings we had at this time of year at the market’s peak. 

The average “Days On Market” (DOM) has increased from 121 days in 2007 to 134 days in 2008. But when you look at the DOM more closely, you see that the average doesn’t tell the true story of what is happening. Upon closer review, the actual numbers appear to be in two separate groups - one group representing homes listed aggressively under market value and selling far more quickly than the average, while the other group is made up of homes listed at or over the perceived market value, spending far more time on market than the average DOM suggests.

The ratio of sales price to list price (SP/LP) slipped slightly from 97% of asking price in the first quarter of 2007 compared to 95% for the first quarter of 2008. But keep in mind that this number represents the list price at the time of sale. It is not uncommon for a homeowner to have dropped their list price significantly before receiving and accepting an offer.

Mortgage rates continue to be consistently low, with conforming rates dropping below 6% over the last few weeks. With regards to the “credit crunch” in the lending industry, although congress is working on composing legislation to make loans more available to the public and trying to help solve lenders’ liquidity problems, for the most part, only buyers with good credit and verifiable assets are having luck obtaining loans.

Big Bear Real Estate Outlook…

With literally dozens of fully-qualified, prospective buyers in my database “waiting for the bottom” to buy, and from hearing similar reports from other agents in the valley, it is apparent that there are still plenty of people interested in buying vacation property in Big Bear. The common phrase “pent-up demand” is an appropriate description of where many buyers are in today’s Big Bear real estate market.

Being that Big Bear is primarily a second home market, there is rarely the necessity to buy a home. As a result, it seems prospective vacation home owners are willing to wait longer before making a move.

This, of course, leads to the most popular question I hear today, “When will Big Bear’s real estate market hit the bottom?”

First off, if anyone gives you what seems to be a definitive answer to this question, seek knowledge from someone else. In comparison to the market drop in the early 1990’s, most agents who were around at that time will tell you that back then, you had a feeling of when things would turn around. But most of those agents agree that in today’s market, there seems to be more uncertainty, as there are as many valid reasons for why the market could rebound tomorrow as there are for supporting the idea of the downturn lasting another year or more.

With prices having tumbled in historic proportions already and with interest rates staying so low, most thought we would have seen a pick-up in sales by now. But referencing the above market summary, this obviously hasn’t been the case. And with second quarter home sales in Big Bear being notoriously slow, I see the soonest that sales might see a significant pick-up is this summer - traditionally our busiest time of year. Of course, some prognosticators are calling for another year or even more before things pick up.

In that regard, there is one saying about the bottom of the real estate market that comes to mind that I have seen mentioned in more than one financial article lately: “By the time we know where the bottom is, it will already be behind us.” Sounds like wise words to me. Just as most of us were wrong about where the top of the real estate market was, I’d assume where the bottom ends up being will surprise us too!

Written by Paul Zamoyta, First Team Real Estate, Big Bear Lake, 909.866.4354

(If you have any questions or comments regarding this blog post, please contact me - blog@zamoyta.com.)

After a long, precipitous winter, it seems like everyone in Big Bear has been quick to turn their attention towards the lake in preparation for the fast approaching summer. We’re beginning to see life again at the local marinas, as they’re de-winterizing boats and performing maintenance on their docks. The east end boat launch has re-opened and the first fishing report of the boating season could be heard on our local radio station just this morning. And although the water temperatures are still in the 40’s, I overheard some adventurous souls the other day talking about heading out on the lake to do some wakeboarding! (I’ll pass for another month or so…)

Anticipation of sunny, summer days on the lake usually brings an increased interest from prospective lakefront home buyers. Having access to your boat right outside your back door comes at a premium here in Big Bear, as lakeside mountain living is something that is quite unique in Southern California, and something that everyone dreams of experiencing.

As one would expect, there are many questions that are asked by prospective lakefront buyers with regards to their rights to use the lake, their right to have their own dock, the size limits of their dock, and with regards to whether or not permits are needed. Hopefully the following will answer some of those questions.

The Authority…

First of all, it’s important to know that your definitive source of information regarding lake rules and regulations is Big Bear’s Municipal Water District. My comments here within are from discussions with people at the MWD as well as my personal experience with regards to lake issues. Regardless, I highly suggest you contact MWD personally (909.866.5796) to get the most up-to-date, accurate advice and information.

Dock Rights? Dock PRIVILEGES!

A common phrase among Big Bear lakefront owners, local lake users, and valley real estate agents alike is the term “dock rights”. Technically speaking, no one has “rights” to a dock on the lake. Since the MWD has governing authority over Big Bear Lake and it’s usage, and since a dock requires paying for an annual permit, your ability to own a dock on the lake is considered a privilege. Being so, the Big Bear MWD has the right to oversee dock issues and make and enforce regulations with regards to such matters.

Permits?

With few exceptions, this year’s annual fee for a dock permit on Big Bear Lake is $310.00. About half that goes towards the permitting and the remainder is put towards weed removal on the lake. (In that regard, the MWD is looking forward to using a newly approved herbicide to help control the presence of weeds in shallow water areas.)

Lakefront owners should receive a letter annually with payment information for their dock permit. Although the MWD updates its annual records via title information, if you are a new Big Bear lakefront property owner, you may want to call the MWD yourself and make them aware of the transfer of ownership on the property and give them your correct mailing address.

Dock Size…

The size of your dock is determined by the extent of your lake frontage. If your property has 50 feet or less of lake frontage, you are relegated to having only one slip. Property with more than 50 feet of frontage can have up to 3 slips. Exceptions are made on a case by case basis, particularly in tight coves where access to each property owners’ docks may be limited under the existing size regulations.

Dock Location…

Think of your side property lines extending out into the lake. Within those conceptual boundaries is where you can put your dock.

Of course, when the lake is low, there is the possibility of an eventual overlapping of conceptual property lines, or property lines that converge. If this ever occurs, the MWD is flexible with homeowners in finding a solution for dock placement. Historically, the MWD has done a good job finding ways for Big Bear lakefront owners to enjoy access to the lake, making every effort to work with property owners when conflicts do arise.

Low Lake Level? No Problem…

Although our lake is currently about 3 feet from full, there are times when the lake level may go down more significantly. In that case, there would be dry land between the high-water line and the actual water line. Techincally speaking, that real estate belongs to the MWD, and is not your personal, private property.

However, the MWD will allow homeowners to push their docks out to where the current water line exists, allowing owners access their docks via the lakebed. In certain circumstances, such as in tight coves when water levels are low, this may become an issue as docks may “overlap”. Again, the MWD, along with the dock owners affected, typically work together to find an agreeable solution.

Looking Forward…

With the lake being close to full and with a constant flow of snowmelt off the surrounding mountainsides expected to keep the lake levels constant throughout the summer, we’re poised to have one of the better lake seasons in recent memory. Check in with the Big Bear MWD with any other questions you may have, and I hope you get a chance to experience Big Bear’s 3000 acre “Blue Jewel” in person this summer.

And of course, if you’ve been considering looking into a lakefront home to call your own, please contact us. We look forward to helping you finding your very own lakeside retreat!

Written by Paul Zamoyta, First Team Real Estate, Big Bear Lake, 909.866.4354

(If you have any questions or comments about this blog post, please contact me: blog@zamoyta.com)

As residents of Southern California’s only four season resort community, we almost never lose sight of how important a role mother nature plays in our well-being. A winter of heavy snow not only makes the skiers and snowboarders happy, but a few months down the line, it makes boaters and lakefront property owners just as appreciative. And of course, the more precipitation we get, the more visitors we get. As a result, we see a more vibrant local economy and more interest from people looking to purchase real estate in Big Bear. The bottom line is that everybody wins in Big Bear when there is a healthy level of precipitation.

As a result, it seems like many people interested in buying a home in Big Bear, particularly people looking for lakefront property, want to know about the history of Big Bear lake levels - a valid concern being that it can directly affect property values.

In that regard, here is a short history of our lake’s “ups and downs” as well as some good resources to consider when looking for further information about our “Blue Jewel”.

As of March 31, 2008, our lake is down 3′ 9″. Relatively speaking, that is pretty much what we locals, for most intents and purposes, consider “full”. Ironically, that is about the same level that the lake was a year ago in the midst of our driest year since the 1800’s. During last year’s dry spell, the lake fell as low as 7′3″ below full in November.

With plenty of snow pack yet to melt on the north facing slopes, I’d expect the lake to creep even closer to full over the next few months and then steady itself off over the summer months. The lake will be in great shape this summer!

Most people who have been around for a few years still remember 2004, when lake levels dropped to over 17 feet from full - the lowest level in recent memory. It didn’t take mother nature long though, as soon after, the winter storms of 2004-2005 almost filled the lake with just a few months worth of snow and rain.

Speaking of a full lake, since 1916, the lake has been considered full to overflowing 15 times! When water levels are within a foot from topping off, the Municipal Water District authorizes a controlled release of water from the dam. The last time a controlled release occured was in 1996, while in the spring of 2006, we were within just a few inches of a release.

So there’s no easy answer as to what a typical lake level is, but if you’d like to see a history of monthly lake measurements, go to www.bbmwd.org/currentlevels.htm. The current year’s levels will be displayed, and at the bottom of the page will be links to access prior years dating back to 1985.

As well, our local newspaper, the Big Bear Grizzly, ran a great article on issues and history regarding our lake recently. Check it out at www.bigbeargrizzly.net/articles/2008/03/06/news/aatroubledwatersa.txt.

Either way, I hope you get a chance to visit Big Bear this summer and experience life on the lake. Whether it be jetskiing, waterskiing, wakeboarding, fishing, sailing, swimming, or cliff jumping at China Island, I’m sure you’ll have a little more fun than usual, being that our wonderfully precipitous winter has given us a little more lake to enjoy this year.

Written by Paul Zamoyta, First Team Real Estate, Big Bear Lake, 909.866.4354

(If you have any questions or comments about this blog post, please contact me at blog@zamoyta.com. )

I know, it’s frustrating. People like me want simple, statistically proven answers. But it’s not that easy. I say this because most people that contact me about real estate in Big Bear want to know the answer to a seemingly simple question: “How much have real estate prices come down in Big Bear?”

I hate to let you down, but there’s no simple, definitive answer. You really can’t, and shouldn’t, look at the average sales price, as there has been relatively strong sales in higher-end homes that skew that figure upward. Median sales price is usually more accurate, but is still flawed for the same reason (though to a lesser extent) as the average sales price.

More accurately, I’ve looked at some properties that were bought a few years back at the market’s peak that have recently resold and discovered a 20-30% drop. This, too, is flawed in that there are only a few homes that have resold under these circumstances, putting this measure on statistically shaky ground. 

So how do you determine how much Big Bear’s real estate market has dropped? The best way might be to look at all possible measures and decide from there, weighing the more accurate measures more than others.

Comparing Condos…

In the spirit of gathering more ways to measure price movement, some real estate financial analysts will look at condominium sales as an accurate measure of market decline. Condos usually don’t change much between owners; most condo owners don’t do significant upgrading to their properties and you can’t make major changes to most units. The exterior of the property is most likely kept in constant order by the HOA as well. Since condo units don’t change much sale to sale, condominium resales are another measure that can make for a fairly accurate picture of what is happening in a real estate market.

What Are Condos In Big Bear Showing Us?

The Bear Meadows Condominiums located on the golf course are seeing about a 20% drop since their peak. In March of 2006, one of the 3 bedroom units sold for a high of $430,000, while there is currently a similar 3 bedroom unit listed at $349,000. 

A 3 bedroom Comstock Condominium, located slopeside at Bear Mountain, sold at a peak price of $462,000 in 2006, while there is a current listing of a comparable unit for $319,900. Assuming the currently listed condo sells at full price, we’re looking at a decline in the neighborhood of 30%.

The Snow Summit Condos, a short walk from Snow Summit Ski Resort, saw a peak sale of $328,000 back in January of 2006. A similar unit is currently listed at $250,000, representing a 24% price decrease.

The Escape Condominiums at Snow Summit saw a high sales price of $299,900 in 2006. A similar unit is now listed for $223,000 making for an approximate price decline of 26%.

The Bayshore Condos on Metcalf Bay sold at a high price of $450,000 in August of 2006. There is a current listing for $395,000 making for a 12% decline.

Boulder Creek Condos dropped from a high of $215,000 to a current listing price of $190,000 for a similarly small decline of 12%.

The Results?

Again, we don’t get any easy, exact answers, but we do get another measure of what prices have done over the past few years. Realistically, I’d have to say that these figures support a valleywide estimate of 20-30% price declines off the market’s peak. But looking at the wide range of declines between the different condominium developments(12% to 30%), it is important to realize that each specific area and market segment behaves differently here in Big Bear; what happens in one neighborhood is not indicative of what has happened in a neighborhood just a few blocks away.

That is why a good realtor who knows the area well and is in touch with what all these “micro-markets” are doing is crucial to have when trying to take advantage of this opportunisitc market. Big Bear is unlike most other Southern California markets, and having a professional guide to the area is paramount to making a good decision as a buyer of Big Bear real estate.

In this regard, if you have any questions with regards to current market conditions, give us a call. We’d love to share our knowledge of Big Bear real estate and help you find the best property out there that fits your needs.

Written by Paul Zamoyta, First Team Real Estate, Big Bear Lake, (909) 866-4354.

(If you have any questions or comments about this post, please email me at blog@zamoyta.com.)

It’s difficult to find a real estate article these days without seeing the word FORECLOSURE. And for good reason - foreclosures have evolved into the main force driving down current real estate values.

But if you listen closely to most reputable real estate analysts, they’ll preface their comments with, Keep in mind that all markets are local. This disclosure is made in recognition of several markets that have done just fine in an otherwise historic time of record real estate price declines. Over the last few years, cities like Portland and Salt Lake City have seen near double digit annual price increases while most other areas have struggled to keep their losses in the single digits.

Why is this? Because all markets are local. When a specific region has a different economy, different growth rate, different market values in terms of affordability, and attracts a different kind of buyer, of course its real estate market will behave differently.

Big Bear, being a mountain resort community, certainly is different from the rest of Southern California. So what effect have we seen in terms of foreclosed properties on the current market in Big Bear?

A Different Story…

Speaking with other Southern California agents, it has become evident that Big Bear has fared relatively well when compared to the foreclosure rates in other local regions.

An agent I was speaking with just yesterday from Orange County mentioned that over one-third of their current real estate listings are distressed properties, short sales, or bank owned properties. I have heard similar numbers from agents in certain regions of San Diego, Las Vegas, Palm Springs and the Inland Empire as well.

In comparison, Big Bear’s local MLS shows only about 5% of our current listings being bank owned properties.

So why would Big Bear have far fewer foreclosures than the rest of Southern California?

First off, over half of Big Bear’s homes are second homes. Being so, it stands to reason that most real estate buyers in Big Bear are people who are relatively affluent, evidenced in having the means to buy a vacation property.

Yes, some people used subprime financing to purchase a vacation home in Big Bear, but those people seem to be fewer in number than in other Southern California markets. There’s no way to objectively quantify the number of buyers over the last few years who have used subprime financing in order to buy a second home in Big Bear, but speaking with local escrow officers as well as other top producing agents with regards to the financing terms of their clients over the last few years, it seems like buyers utilizing subprime loans in order to purchase their Big Bear properties were few and far between.

A friend who is a mortgage broker suggested to me another reason Big Bear saw fewer subprime loans; although subprime financing may have been easy to obtain for a primary residence, it was significantly harder to justify for a second home.

Secondly, Big Bear did not see the level of “over-building” that most other regional areas saw over the last few years. Yes, Big Bear saw its share of speculative building, but nothing compared to the thousands of speculatively built track homes sprawling over many regions of Southern California that are now sitting vacant and unsold, listed at half their original list price. It is this speculative home inventory which has resulted in submarining home values in many Southern California real estate markets.

Speculative “over-building” was present in Big Bear over the last few years, and it did have a negative effect on Big Bear’s market, but it has not nearly had the devastating consequences it has had in other areas.

Big Bear’s Foreclosure Impact…

A recent review of properties that were bought during the last few years and resold as bank owned foreclosures recently showed that these properties were selling on average for almost 30% less than what they were originally purchased for. The sample size from which to choose from for this comparison was relatively small, so there is probably a somewhat large margin of error, but 20-30% price declines sound about right from a “gut-feel” perspective of the foreclosure market.

Expectedly, foreclosed properties are being favored by buyers as well. With only 5% of listed properties being bank owned, 10% of all sales so far this year have been the purchase of foreclosed properties. Also from a “gut-feel” perspective, I’d imagine the number of foreclosure sales to increase significantly over the current year as our office has seen an incredible amount of interest from people looking to buy foreclosed properties.

What Kind of Properties are Being Foreclosed on?

Of the current bank owned properties for sale, over half those are listed for under $200,000, with the highest priced foreclosure being listed at $549,000.  Looking back at last year’s foreclosure sales, we see similar figures with a majority of foreclosures being under $250,000. With most of the bank owned listings and sales being in the lower end market, more expensive properties have faired better in terms of retaining their market value.

The Future…

Although no one can predict the future, it seems like certain patterns have emerged that will most probably stick around the rest of the year. Based on the number of rate resets expected in the subprime loan arena, we’ll probably see more foreclosures this year. Based on the already seen trends, I’d expect that to remain mostly in the lower priced properties. 

As a result, I’d expect foreclosed properties to become even more of a buyer’s favorite. With these lower-end properties being bought up, we’ll probably see the valley’s average sale price and median sale price decline slightly.

The bottom line is that the deals are out there. With foreclosures resulting in deep discounts and with mortgage rates still hovering around historically low levels, there hasn’t been a better time to buy a house in the last five years.

If you’re interested in a list of current foreclosures, please don’t hesitate to contact us!

(If you have any questions or comments regarding this post, please contact me at blog@zamoyta.com)

Written by Paul Zamoyta, First Team Real Estate, Big Bear Lake, (909) 866-4354.

As part of the economic stimulus package passed by congress last month, the federal guidelines for FHA and conforming loans have loosened significantly allowing for more people to get easier and less expensive financing. It is widely held that these new measures should help speed the recovery of the current slump in the real estate market.

FHA LOANS…

 FHA loans (Federal Housing Administration) are federally sponsored loan programs designed to encourage people to become homeowners. Often mistaken as a program solely for first time homebuyers, FHA loans are a popular choice among those who simply want to buy a primary residence. FHA loans traditionally require a smaller down payment, are more lenient with qualifying credit scores, and being government backed, result in competitive interest rates.

 Previously, FHA loans would only involve loans up to $362,000. But with the new guidlines set forth in the recently passed economic stimulus package, new loan amounts are being adjusted to reflect local home prices. The new guidelines raise the existing loan limit to $417,000 allowing for adjustments of the loan limits to up to 125% of the area’s median home price, with a cap set at $729,000. The raising of these limits should not only enable more people to buy a home, but it should also allow more people who are in adjustable loans - many with loans ready to reset at much higher rates - to qualify for refinancing.

CONFORMING LOANS AND JUMBO LOANS…

As well, conforming loan amounts are expecting a similar adjustment. Previously, if you were carrying a loan of less than $417,000, you would most likely have what is called a conforming loan. Conforming loans -loans under $417,000 - were backed by Fannie Mae and Freddie Mac; two quasi-government loan insurers. Since these loans were insured, they offered low interest rates to consumers as there was less risk to the lender.

 Loans more than $417,000 were not backed by Fannie Mae and Freddie Mac. Therefore, there was more risk involved on behalf of the lender, and interest rates were many times 1% or more than their conforming counterparts. Loans for amounts over the conforming loan limit are called jumbo loans.

Under the new guidelines, conforming loan amounts will also adjust to 125% of local median home prices, allowing for more people to buy more expensive homes at a lower interest rate. California in particular, which has some of the highest real estate prices in the country, should benefit significantly from the new adjustments to these loan limits.

Although the economic stimulus package has already been passed, it will still be a few weeks before we see lenders issue loans along these new guidelines. It has yet to become clear what “125% of the local median price” means. Many are saying the local area will be defined by county, while others are suggesting by zip code or even by census track. When reviewing these aforementioned possibilities, Big Bear is expecting to see conforming loan limits to raise to somewhere between $480,000 and $640,000.

Regardless, when these changes do occur, we’re sure to see an uptick in sales as these new loan limits should make buying a home significantly more attactive to many prospective buyers. Will this increase in buying be the turn around in the market we’ve been waiting for? No one knows for sure, but it sure will be a welcomed change from 2007 in which Big Bear saw the fewest number of sales in over 25 years!

Written by Paul Zamoyta, First Team Real Estate, Big Bear Lake, 909.866.4354

(If you have any questions or comments about this post, please email me at blog@zamoyta.com)

Yesterday’s edition of the New York Times wrote a wonderful article on Big Bear as being a great place to own a second home.

Check out the article for yourself:

http://www.nytimes.com/2008/02/29/travel/escapes/29havens.html?_r=1&oref=slogin

 There’s a lot to be thankful for so far his year in Big Bear: we’ve had one of the best snow years in recent memory, the precipitation has returned the lake to near full levels, and our local economy has done well seeing more visitors this winter than usual.

 There are encouraging signs in the overall real estate market as well: interest rates (30 year fixed) have dipped below 6% again and are poised to drop further, the feds are raising the FHA and conforming loan limits to keep rates reasonable for those looking to buy more expensive properties, and prices have already dropped significantly.

Hope you can make it up soon to enjoy the great snow and sunny weather!

(If you have any questions or comments about the above post, please contat me at blog@zamoyta.com)

 Written by Paul Zamoyta, First Team Real Estate,  Big Bear Lake, (909) 866-4354.

This week’s mortgage rates fell almost a quarter point as the national average for a 30 year fixed rate loan fell to 5.79 percent in the wake of speculation that the Federal Reserve Bank will lower rates a half point at their upcoming January meeting.

With mortgage rates approaching historic lows, home prices having corrected substantially in many markets, and other investment avenues seeming shaky at best in today’s economy, many prognosticators are expecting an increased interest in real estate, potentially resulting in a sooner than expected turnaround in the marketplace.

In Big Bear particularly, with a relatively high number of homes still for sale, the market is prime for finding the home that best fits what one is looking for. As well, with sellers having to compete to get their homes sold, the market is also prime for finding deals as buyers still have a strong upper hand in negotiations.

What the future has in store is anyone’s guess, but one thing is for sure: we haven’t seen a more advantageous time to buy a home for quite a while. If you have been considering buying a Big Bear home, it certainly is a worthy time to look into the opportunities that are out there!

Written by Paul Zamoyta, First Team Real Estate, Big Bear Lake, (909) 866-4354

(If you have any questions or comments about this post, please email me at blog@zamoyta.com .)